Vmware Inc (VMW) Stock Fundamental Analysis
USA - NYSE:VMW - US9285634021 - Common Stock
142.48 USD
-7.43 (-4.96%)
143 USD
+0.52 (+0.36%)
VMW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 285 industry peers in the Software industry. VMW has an excellent profitability rating, but there are concerns on its financial health. VMW has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
VMW had positive earnings in the past year.
In the past year VMW had a positive cash flow from operations.
In the past 5 years VMW has always been profitable.
In the past 5 years VMW always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.43%, VMW belongs to the top of the industry, outperforming 82.92% of the companies in the same industry.
VMW's Return On Equity of 55.99% is amongst the best of the industry. VMW outperforms 97.86% of its industry peers.
VMW has a better Return On Invested Capital (7.86%) than 85.05% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for VMW is below the industry average of 11.90%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.43% | ||
| ROE | 55.99% | ||
| ROIC | 7.86% |
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
1.3 Margins
Looking at the Profit Margin, with a value of 10.48%, VMW belongs to the top of the industry, outperforming 84.70% of the companies in the same industry.
VMW's Profit Margin has improved in the last couple of years.
VMW has a better Operating Margin (14.00%) than 84.70% of its industry peers.
In the last couple of years the Operating Margin of VMW has declined.
VMW has a Gross Margin of 81.19%. This is amongst the best in the industry. VMW outperforms 86.83% of its industry peers.
In the last couple of years the Gross Margin of VMW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14% | ||
| PM (TTM) | 10.48% | ||
| GM | 81.19% |
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
2. Health
2.1 Basic Checks
VMW has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
VMW has more shares outstanding than it did 1 year ago.
The number of shares outstanding for VMW has been increased compared to 5 years ago.
VMW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 1.85 indicates that VMW is not a great score, but indicates only limited risk for bankruptcy at the moment.
VMW's Altman-Z score of 1.85 is in line compared to the rest of the industry. VMW outperforms 48.40% of its industry peers.
The Debt to FCF ratio of VMW is 2.25, which is a good value as it means it would take VMW, 2.25 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.25, VMW is in the better half of the industry, outperforming 73.67% of the companies in the same industry.
VMW has a Debt/Equity ratio of 3.73. This is a high value indicating a heavy dependency on external financing.
VMW has a Debt to Equity ratio of 3.73. This is amonst the worse of the industry: VMW underperforms 87.19% of its industry peers.
Even though the debt/equity ratio score it not favorable for VMW, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.73 | ||
| Debt/FCF | 2.25 | ||
| Altman-Z | 1.85 |
ROIC/WACC0.77
WACC10.18%
2.3 Liquidity
VMW has a Current Ratio of 0.87. This is a bad value and indicates that VMW is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of VMW (0.87) is worse than 82.56% of its industry peers.
VMW has a Quick Ratio of 0.87. This is a bad value and indicates that VMW is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.87, VMW is not doing good in the industry: 81.49% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 |
3. Growth
3.1 Past
VMW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.90%.
VMW shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.63% yearly.
VMW shows a small growth in Revenue. In the last year, the Revenue has grown by 3.56%.
The Revenue has been growing by 11.17% on average over the past years. This is quite good.
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%
3.2 Future
VMW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.04% yearly.
The Revenue is expected to grow by 8.40% on average over the next years. This is quite good.
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 20.59, VMW is valued on the expensive side.
85.77% of the companies in the same industry are more expensive than VMW, based on the Price/Earnings ratio.
VMW's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.77.
With a Price/Forward Earnings ratio of 17.40, VMW is valued on the expensive side.
85.41% of the companies in the same industry are more expensive than VMW, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of VMW to the average of the S&P500 Index (23.23), we can say VMW is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 17.4 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, VMW is valued cheaper than 85.41% of the companies in the same industry.
92.53% of the companies in the same industry are more expensive than VMW, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.2 | ||
| EV/EBITDA | 20.29 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VMW does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of VMW may justify a higher PE ratio.
PEG (NY)2.08
PEG (5Y)4.45
EPS Next 2Y12.07%
EPS Next 3Y8.72%
5. Dividend
5.1 Amount
VMW does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
142.48
-7.43 (-4.96%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustrySoftware
Earnings (Last)
Earnings (Next)
Inst Owners0.21%
Inst Owner Change0%
Ins Owners0.31%
Ins Owner Change0%
Market Cap61.52B
Analysts53.33
Price Target169.22 (18.77%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.18%
Min EPS beat(2)-5.43%
Max EPS beat(2)5.79%
EPS beat(4)2
Avg EPS beat(4)0.57%
Min EPS beat(4)-7.68%
Max EPS beat(4)9.61%
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-2.31%
Min Revenue beat(2)-2.35%
Max Revenue beat(2)-2.27%
Revenue beat(4)1
Avg Revenue beat(4)-2.07%
Min Revenue beat(4)-5%
Max Revenue beat(4)1.34%
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0%
PT rev (3m)9.94%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.95%
EPS NY rev (1m)0%
EPS NY rev (3m)2.55%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.35%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.59 | ||
| Fwd PE | 17.4 | ||
| P/S | 4.52 | ||
| P/FCF | 13.2 | ||
| P/OCF | 12.08 | ||
| P/B | 24.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 20.29 |
EPS(TTM)6.92
EY4.86%
EPS(NY)8.19
Fwd EY5.75%
FCF(TTM)10.8
FCFY7.58%
OCF(TTM)11.79
OCFY8.28%
SpS31.52
BVpS5.9
TBVpS-17.18
PEG (NY)2.08
PEG (5Y)4.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.43% | ||
| ROE | 55.99% | ||
| ROCE | 9.79% | ||
| ROIC | 7.86% | ||
| ROICexc | 12.08% | ||
| ROICexgc | 56.72% | ||
| OM | 14% | ||
| PM (TTM) | 10.48% | ||
| GM | 81.19% | ||
| FCFM | 34.25% |
ROA(3y)5.88%
ROA(5y)10.66%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)9.4%
ROIC(5y)10.41%
ROICexc(3y)12.19%
ROICexc(5y)13.94%
ROICexgc(3y)39.61%
ROICexgc(5y)182.58%
ROCE(3y)11.7%
ROCE(5y)12.97%
ROICexcg growth 3Y-2.41%
ROICexcg growth 5YN/A
ROICexc growth 3Y8.25%
ROICexc growth 5Y-17.26%
OM growth 3Y2.65%
OM growth 5Y-7.92%
PM growth 3Y-45.05%
PM growth 5Y3.26%
GM growth 3Y-0.79%
GM growth 5Y-0.97%
F-Score6
Asset Turnover0.42
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.73 | ||
| Debt/FCF | 2.25 | ||
| Debt/EBITDA | 2.95 | ||
| Cap/Depr | 32.82% | ||
| Cap/Sales | 3.16% | ||
| Interest Coverage | 6.23 | ||
| Cash Conversion | 158.38% | ||
| Profit Quality | 326.93% | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.87 | ||
| Altman-Z | 1.85 |
F-Score6
WACC10.18%
ROIC/WACC0.77
Cap/Depr(3y)34.45%
Cap/Depr(5y)34.05%
Cap/Sales(3y)3.06%
Cap/Sales(5y)2.88%
Profit Quality(3y)236.48%
Profit Quality(5y)194.34%
High Growth Momentum
Growth
EPS 1Y (TTM)3.9%
EPS 3Y0.31%
EPS 5Y4.63%
EPS Q2Q%11.59%
EPS Next Y9.9%
EPS Next 2Y12.07%
EPS Next 3Y8.72%
EPS Next 5Y7.04%
Revenue 1Y (TTM)3.56%
Revenue growth 3Y7.28%
Revenue growth 5Y11.17%
Sales Q2Q%2.16%
Revenue Next Year4.52%
Revenue Next 2Y5.39%
Revenue Next 3Y5.55%
Revenue Next 5Y8.4%
EBIT growth 1Y-16.59%
EBIT growth 3Y10.12%
EBIT growth 5Y2.37%
EBIT Next Year34.25%
EBIT Next 3Y19.61%
EBIT Next 5YN/A
FCF growth 1Y13.1%
FCF growth 3Y2.33%
FCF growth 5Y5.43%
OCF growth 1Y14.56%
OCF growth 3Y3.56%
OCF growth 5Y5.97%